Welcome to the Dürr Conference Call. Dr. Jochen Weyrauch, CEO, and Dietmar Heinrich, CFO of Dürr AG, will present the Dürr Group's preliminary figures of 2022, followed by a Q&A session. Please note that this call is being recorded today on Thursday, the 23rd of February, 2023. I will now hand over to Andreas Schaller, Head of Investor Relations of Dürr AG. Thank you, Jess. Ladies and gentlemen, good afternoon and good morning to those of you in the U.S. Welcome everybody to our earnings conference call. With me on the call today are our CEO, Jochen Weyrauch, and our CFO, Dietmar Heinrich. They will present the preliminary results of the financial year 2022 as well as the outlook for 2023, and we will be happy to answer your questions afterwards. As always, our earnings presentation is available on our investor relations web pages, and we assume that you have it in front of you. Please be aware of our disclaimer regarding forward-looking statements on slide two. Now it is my pleasure to hand over to our CEO. Jochen, please go ahead. Thank you, Andreas, for the short introduction. A warm welcome also from my side to all participants on this call. Let me start with some short remarks on the past year. 2022 was more challenging than we thought at the beginning of the year. The attack of Russia against Ukraine and the extended lockdowns in China in the second quarter resulted in severe supply chain constraints and additional material cost inflation. Despite all this, the Dürr Group's top line growth in 2022 was better than expected and the margin development in line with the guidance we gave in early May. This was only possible because the whole Dürr Group actively took on these challenges and found solutions to reduce the impact. Let me take this opportunity and thank all our employees for their great commitment and exceptional efforts. Let's turn to the agenda. As usual, I will start with a review of our performance in 2022. After that, I will briefly comment on the performance of our divisions before Dietmar will go into more details regarding the financials. At the end, we will have a look at the guidance for 2023, and we will have sufficient time to answer any questions you might have. The highlights of 2022 are on slide four. For the first time in our history, we achieved an order intake of above EUR 5 billion. This was driven by several factors. First of all, order intake reached the record level of the prior year due to a strong first half and despite a somewhat weakening momentum in the second half. We have seen a significant increase in demand in the second half of 2022 from automotive customers as established OEMs started large greenfield and refurbishment projects while there was still solid demand from EV startups. In addition, contract awards for battery gigafactory projects in Europe gained momentum, and we received several orders for Solvent Recovery Systems. In total, order intake for battery production equipment exceeded EUR 100 million in 2022. Last but not least, order intake in the High-Performance Automation business successfully grew to a new record level. This included a larger order for Stringer machines for the assembly of solar panels, like you can see on the cover of this presentation. Order backlog stood at more than EUR 4 billion at the end of the year. This is an extremely solid base for sales growth in 2023, as you will recognize when we look at our sales guidance later on. Sales revenues also reached a new record level of EUR 4.2 billion. We had a strong finish of the year with a new quarterly sales record in Q4, driven by the recovery in the automotive business and easing supply chain constraints. EBIT before extraordinary effects grew to EUR 232 million. With 5.4%, margin reached the lower half of the guidance range of 5%-6.5%, as predicted in November when we published our Q3 earnings. A strong finish in Q4 with a margin of 6.8% helped to recover some of the margin loss we incurred earlier in the year due to the lockdowns in China. All in all, I believe that we managed supply chain constraints, production disruptions, and cost increases very well during last year. Free cash flow remained strong in Q4 due to the continued disciplined working capital and CapEx management. Based on the high order backlog, the overall solid demand environment and the margin improvement measures we have implemented, we are confident to take further steps towards our midterm targets and grow profitably in 2023. We will look at the details of the guidance at the end of the presentation. On slide five, we see the financial indicators for 2022. Order intake increased by 17% to slightly more than EUR 5 billion. This includes 119 million of positive exchange rate effect. Sales revenues grew 22% and included positive foreign exchange effect of EUR 136 million. EBIT before extraordinary effects increased 70%. The margin declined slightly to 5.4% due to the earnings effect from the China lockdowns in Q2 and higher material costs. The foreign exchange effect was EUR 11 million. Net income was 58% higher compared with 2021. In addition to the high EBIT, we also recorded a better financial result. Finally, the free cash flow of EUR 117 million almost reached the prior year's level. This is equal to cash conversion with respect to net income of 85%. On slide six, we can see the comparison of the actual results with the original guidance from February and the last guidance provided in November. Order intake came in far better than expected at the beginning of the year due to the drivers already mentioned in the highlights. Sales revenues slightly exceeded the guidance that was unchanged during the year, despite supply chain constraints. This achievement reflects our success in increasing prices and securing parts for our products, sometimes by means of redesigns. EBIT margins before and after extraordinary effect, reached the levels as predicted when we revised our guidance in early May. The revision was done at the beginning of the China lockdowns. We were one of the companies that did not suspend guidance, but gave a new guidance based on the confidence in our own capabilities. Earnings after taxes even reached the low end of the original guidance and free cash flow exceeded the guidance that was unchanged during the year. Dietmar will talk about the drivers for this in his part of the presentation. Due to the strong cost increases for building materials, we delayed part of our CapEx program at Demag. This is why the CapEx to sales ratio came in lower than planned at 3.2%. We believe it is fair to say that we performed well in a very challenging year. Let's take a look at the order intake on slide seven. We started with a very high level of orders in the first half year, driven by HOMAG. In the second half, demand shifted towards automotive as the momentum at HOMAG started to normalize from the peak levels. For the full year, we reached a book-to-bill ratio of 1.16. In the fourth quarter, however, the book-to-bill ratio fell below one due to the very strong sales performance. The high order intake and the resulting order backlog is a very solid basis for 2023. On slide eight, we see the geographical distribution of order intake. After several strong years, we have experienced some softening of demand in China, still at a very high level. This was overcompensated by strong investments done by our customers in North America. Orders in Germany grew, driven by demand for automotive, P&F, and environmental equipment. In emerging markets, we experienced increasing order intake, especially in India, also in South Africa. With our global footprint, we can balance demand fluctuations in local markets and are able to capture growth on a global level. The transformation towards e-mobility and the related modernization of production plants are key demand drivers for us. On slide nine, we see the growth trajectory for EV-related order intake. We reached a level of more than EUR 1.1 billion in 2022, the compound average growth rate of at least 20% stood at more than 30%. We believe that this growth driver will continue to support our business as well in 2023. Sustainability is another key driver of our business, and we are also taking measures ourselves to reduce our carbon footprint. On slide 10, we see the reduction in Scope one and two emissions compared to the base year of 2019. By switching to green electricity in Germany, the Americas, and India, we already achieved a reduction in emissions of about 50% measured in CO2 equivalents. That means we're well on track to reach our target of a 70% reduction by 2030. In 2023, we plan to switch to green electricity at the remaining global locations and we will further invest into photovoltaic systems. In addition, we have revised our company car fleet policy and incentivized the conversion to electric vehicles. Overall, we continue to follow our strategy to invest into CO2 reduction rather than compensate. Another topic that has gained a lot of importance in recent years is the respect for human rights. On slide 11, we show some of the targeted actions that we have taken in 2022 to improve governance and prevent human rights violations in our supply chain. Our corporate due diligence approach is described in the policy statement on the respect for human rights that you can find on our webpage. We have conducted a thorough risk analysis on country level and assessed the supplier sustainability performance using standardized questionnaires. Our Supplier Code of Conduct is a prerequisite for collaborating with us. In addition, we provide professional e-learning to suppliers in human rights and our requirements. Let's have a look at the divisional development. We will start with Paint and Final Assembly Systems on slide 13. Order intake reached a new record in 2023. Q4 was a bit solid 2022. Q4 was a bit weak due to timing effects. We continue to see a very strong project pipeline and already at capacity limits. We are in a good position to continue with our margin-oriented value before volume strategy. Sales revenues increased 32% as the business is recovering from the low order intake during the beginning of the COVID-19 pandemic. The EBIT margin recovers as well due to a better capacity utilization and the beginning phase of our lower margin projects taken during the COVID pandemic. Q4 sales revenues were particularly strong. The EBIT margin reached a level of more than 6%, also driven by a high service share. Based on the high order intake and backlog, we expect meaningful growth in 2023. Let's turn to Application Technology on slide 14. In this division, order intake reached a new record while sales revenues grew strongly too. The margin recovery was, however, impacted by a higher equipment share in the sales mix, weak service business during the China lockdowns, and increased costs for managing the high inventory levels as a safeguard against the supply chain constraints. Since the beginning of the current year, we have seen a strong service order pipeline that should support margin development in 2023. Next is Clean Technology Systems on slide 15. Once again, we can report a new record in order intake there as well. Q4 was particularly strong as we received several orders from battery manufacturers, mainly for solvent recovery equipment for Kia factories in Europe. Sales revenues grew across many regions, with China and North America contributing strong. The service business continues to grow even faster. On the margin side, we saw some improvement in Q4. We are still experiencing pressure from high material costs. In 2023, we will accelerate to invest in R&D to scale up our proprietary coating technology to gigafactory standards. This will temporarily impact the margin development. Operationally, we will focus on margin recovery and see significant growth potential going forward. On slide 16, we can see the summary of developments at the Measuring and Process Systems division. Order intake momentum was strong in 2022, especially in North America and Asia, across all product lines. The service business developed very nicely. Sales revenues and margins fluctuated during the year as supply chain bottlenecks and lockdowns in China led to underutilization in production. In the second half of 2022, these bottlenecks were easing, both sales revenues and EBIT margins recovered strongly. In Q4, the EBIT margin even reached a level of 10%. For the full year, we achieved 6.2%, which is in the upper half of the guidance range. Business is back on a good track, we expect profitable growth in 2023. Last but not least, let's take a look at HOMAG on slide 17. Order intake for the full year reached the record level of the prior year. We saw a declining trend reaching the lowest level in Q4 as customers were hesitant in placing orders due to uncertainties around a potential larger recession in Europe. We expect a recovery of order intake in Q1 2023, as these fears have calmed down and a solid pipeline exists in many regions. The demand for equipment for the pre-production of wooden construction elements remains solid, and we expect further growth in this area. We achieved the new record levels for sales revenues despite the supply chain constraints. This was supported by the high order backlog at the beginning of 2022, a good management of parts that were tight in supply, and price increases that we started to implement already 18 months ago. These price increases, together with high efficiencies, also drove margins to a higher level compared with the prior year. Even though we foresee a normalization of order intake in 2023, we expect the high order backlog to support sales growth in 2023. We will continue to focus on margin improvements as we want to reach our goal of 9% EBIT margin before extraordinary effects in 2023. Now, let's move on to the service business on slide 18. Service sales reached a new record level in Q4, driven by strong demand from automotive. However, due to the strong growth in equipment sales, the service share of revenues remained below the target level of 30% for Q4 and the full year. We continue to work on increasing our service business. In particular, we see potential at HOMAG, where we have hired additional personnel. Now, Dietmar, hand over to you for the finance. Yeah, thank you, Jochen, and welcome to everybody also from my side. I start with slide 20. The financial year 2022 finished on a positive note. As already mentioned, order intake and sales revenues reached new record levels, and the free cash flow exceeded the guidance for the year. Let's have a look at the financial details on the next slides. On slide 21, we can see that sales revenues in Q4 grew year-over-year by 23% to a new record level of EUR 1.2 billion. This was supported by the supply chain improving and an increasing number of automotive projects being executed. From a regional perspective, China has gained share based on the strong order intake of the prior years, and the Americas started to gain traction. Supply chain constraints are largely reduced. However, there are still some electronic components that are tight in supply. Let's move to EBIT on slide 22. EBIT margins continued to recover and reached 6.8% before extraordinary effects in Q4, driven by the strong sales growth. As the Paint and Final Assembly Systems business is recovering from the pandemic, we are seeing some mix effects as the margins in the more construction type business are lower than the machinery business. EBIT growth was driven by higher gross profit. Overhead costs rose year-on-year, mainly pushed by sales commissions due to the record order intake, higher R&D costs, and negative foreign exchange rate effects. Extraordinary effects were close to the level of the prior year. All in all, the strong finish in Q4 partly compensated the weak second quarter that was impacted by the COVID-19 lockdowns in China. On slide 23, we can see the free cash flow development. We recorded another strong quarter in Q4 and finished the year with EUR 117 million, which is EUR 17 million ahead of the upper edge of the guidance. Free cash flow in 2022 benefited from high prepayments due to the record order intake. This was offset by a large increase in inventories. We manage CapEx in a very disciplined way and focus on efficiency improvement measures. Payments for income taxes were higher, interest payments were lower than in 2021. All in all, free cash flow reached a similar high level as in the prior year. Jochen already mentioned that this is the third consecutive year with a very good cash generation and conversion. Let's look at the net working capital development on slide 24. Net working capital remained relatively stable and reached EUR 460 million at the end of 2022. Inventories and contract assets increased because of growing sales revenues and still elevated safety stock levels. This increase was compensated by higher trade payables and contract liabilities. With sales revenues growing, the days working capital declined from 23.6 in 2021 to 34.7 in 2022, which is actually better than our target range of between 40 and 50 days. Net working capital management will remain high on the agenda in 2023, as we seek to partly compensate a lower level of prepayments with lower inventory levels. On slide 25, we can see the positive impact of the free cash flow on our net financial status. Net debt declined to EUR 46 million at the end of 2022. This includes EUR 95 million of leasing liabilities. Leverage stands at zero thousand one times net debt to EBITDA. As such, I can summarize, we are very pleased with our solid balance sheet. Finally, let's have a look at our liquidity headroom on slide 26. Available funds all amount to almost EUR 1.4 billion. This compares to maturities of only EUR 50 million within the next 12 months related to a bridge line loan maturing in April 2023. We feel very comfortable with our liquidity headroom, which leaves us the ability to further grow our business. With this view from the financial side, I hand back to Jochen Weyrauch for the outlook. Thank you very much, Dietmar. Let's turn to the outlook. On slide 28, we can see the fundamental demand drivers for our business that you should already know from past presentations. Nevertheless, we show this slide once again, as there are still people out there wondering why the order intake has been so resilient when everybody's talking about the potential recession. We believe that our business is currently driven by specific long-term trends. This includes the transformation to e-mobility, the decarbonization of production processes in the automotive industry, and the transformation in construction to use more and more prefabricated wooden construction elements. On top, we are benefiting from the electrification of processes that were formerly using fossil fuels, for example, in air purification systems. All these trends should provide a solid support of our business over the next years. This does not mean that our business will not show any demand cycles anymore. This will still be the case, and can be seen in 2023, when we expect a lower demand from the furniture industry, but the springs in order intake should be less pronounced as the dynamics of different business areas balance each other. Instead of showing LMC-like vehicle production forecasts like in the past, we now focus on the production growth of battery-powered electric cars, as this is a better indicator for the order investment dynamics of our customers. On slide 29, we see the growth trajectory over the next years. Advanced development for woodworking machinery is shown on slide 30, separately for furniture and wooden construction. While we expect a cyclical weakening of furniture sales in 2024, which is reflected in our order intake guidance for 2023, we see a solid growth in the area of wooden construction over the next years. Let's take a look at the guidance for 2023 on slide 31. The guidance assumes that the war in Ukraine remains limited to the country and that there are no new global conflicts arising that could significantly impact global growth. After the record year of 2022, with EUR 5 billion order intake, we expect a cyclical slowdown for 2023 to a range of between 4.4 billion and EUR 4.8 billion. Main driver of this development is a softening in demand for woodworking machinery from the furniture industry. On the automotive side, we already took in a lot of orders in the second half of 2022. The slightly lower order intake expectations in 2023 reflect this timing effect and the fact that we are approaching capacity limits. For sales revenues, we see a different development. Due to the high order backlog, we expect further growth to range between EUR 4.5 and EUR 4.8 billion. Main driver will be the Paint and Final Assembly Systems division that continues its recovery from the COVID-19 pandemic. Also for HOMAG and the other divisions, we see potential for further revenue growth. Looking at the EBIT margin before extraordinary effects, we target a range of between 6% and 7%, which is a step in the direction of our midterm target of 8% that we want to reach in 2024. The extraordinary effects should decline in 2023 to EUR 20 million due to lower TP effects from the past HOMAG acquisition. Margin growth should be supported by all divisions as supply chain constraints ease and margin improvement measures like our value before volume strategy and the efficiency improvements at HOMAG become effective. This translates into a ROCE of between 19% and 23%, and net income of between EUR 160 million and EUR 210 million. For free cash flow, we once again target a range of between 50 million and EUR 100 million. While we expect a higher EBITDA due to the sales growth and improved margins, we also target to spend higher CapEx of between 4% and 5% of sales revenues. On the net working capital side, we target to at least partially balance lower prepayment with lower inventories. In a nutshell, we would like to take a solid step towards our midterm goals. On page 32, we can see the outlook by division. I already pointed out some specific developments when talking about the group guidance and will not go into further detail at this stage. Before the summary, I would like to highlight our strategy for profitable growth on slide 33 that we presented at our capital markets day in November. We are targeting sales revenues of more than EUR 6 billion by 2030, which is equivalent to a tail of 5%-6% over the next years. For EBIT before extraordinary effects, we target 8%, and for ROCE, 25% in 2024. Let's summarize on slide 35. We achieved new records for order intake and sales revenues in 2022. The high order backlog at the beginning of 2023 is a solid base to drive further revenue growth in 2023 to a level of between 4.5 billion and EUR 4.8 billion. The EBIT margin in 2022 was impacted by the lockdowns in China, supply chain constraints, and material cost inflation. We achieved the adjusted guidance as predicted in May. The fundamental demand drivers for business like mobility, decarbonization of production processes, and construction with wood remains intact. We help our customers to achieve efficient and sustainable production. We expect to achieve profitable growth in 2023 based on our value before volume strategy, high capacity utilization, price increases, and further efficiency improvements. We remain on track to achieve our midterm goals in 2024. Thank you very much for your attention. We're happy to answer any questions you might have. If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally, and you'll be advised when to ask your question. Once again, that's star one, if you would like to ask a question. The first question comes from the line of Marianne Boulad from Bank of America. Please go ahead. Yes, good afternoon. Thank you for taking my question. As a first question, I was wondering if you could comment on the reopening of China and what you've seen in the first two, three, two months of 2023, and what you expect for the rest of the year. Thank you, Marianne, for the question. We are quite positive about China. I mean, we all have seen the change in policy in China from a 0 COVID policy to a 100% COVID policy, I must almost say. What we've seen is increasing attitude in China. We see that from our employees. We see that in the market. We continue to see a strong order pipeline. Actually, that pipeline, even in the second quarter of last year, never went away. Of course, we were concerned. Since, especially now, after the Chinese New Year, we see continued and increased momentum in the market, especially on the Chinese OEM side. Okay, thank you. Thank you very much. As a second question, looking at the Paint and Final Assembly margin and the project execution, do you have a timeline of when you expect to completely phase out the low margin projects and to now have into the revenues and into the margin, the better selected projects? Yes, absolutely. As you know, our bookkeeping is percentage of completion, so those projects gradually go out. I can say there is not much left now in the backlog of those subdued margins from the COVID area. Those projects are mainly completed or at the end of the project phase. The backlog, meanwhile, starts to be dominated by much better margin projects. Okay, thank you. Thank you for the question. The next question comes from the line of Ingo Schachel from BNP Paribas Exane. Please go ahead. Okay, thanks for taking my questions. The first one would be on Clean Technology Systems, specifically on the battery production equipment. Whether you could quantify a bit how much revenues and profit or loss contribution from these activities is included in your guidance for 2023? Then maybe also comment a bit on when you expect to be able to win the first coating scope projects on the gigafactories as well, or if I understood correctly, that's end of this year, beginning of next year? Thank you, Ingo, for the question. In CTS, as you know, we've booked about EUR 100 million of orders during the last year, mainly from solvent recovery, but there was also smaller scale coating projects. What we're doing right now, we are in the midst of the development phase, and we will, of course, finish that during the year, but much earlier than the end of the year to have our larger scale own coating technology available. Again, if I may add two sentences, we work on two technologies. One technology in cooperation with a Japanese established manufacturer, Techno Smart. That is the Tandem technology, where you coat one side after another. That is established technology. In parallel, we are finishing the development of our own simultaneous double-sided coating, which happens during the course of this year. We have this technology in the market for smaller scale productions like we have published Cellforce/Porsche. Our intent is to sell the first gigafactory when it comes to coating during the course of this year. Of course, depends on projects and project decisions. Overall, as we not only do the coating, but also the drying and the solvent recovery, in any case, this business is planned to be grown this year further up from the EUR 100 million that we had last year. In terms of profitability, you were asking, we will still, with high R&D efforts during the course of this year, if you isolate that business, that business will still not be positive. That's factored into the guidance for CTS. Of course, the intention is that next year, latest year after, this will become a profit contributor, bottom line to our business. Okay, good. That's, that's very clear. Maybe on the HOMAG margin guidance and also margin trajectory to the midterm targets. I think when you presented the 10% target at the capital markets day, we were left with the impression that on an underlying basis, the 2022 margin would already have been very strong if it hadn't been for supply chain and certain other factors. At least I was thinking that already in 2023, the margin could be a bit higher and that maybe 2024 could even be weaker because that's the year when you expect woodworking machinery markets to be possibly a bit weaker in terms of production volumes. Can you talk a bit about why the margin in 2023 would not be better than the sort of underlying level you had in 2022? Also whether your view has changed at all on timing, i.e., whether you already see a quicker decrease of woodworking machinery, volumes in 2023 and then maybe an earlier recovery in 2024 versus the, say, more 2024 loaded, decline that you had guided at the capital markets day. There is basically no change from what we have guided during the capital markets day. On HOMAG, yes, this is a fair point you're making. We did 7.8% in operational margin last year. If you added everything on top of that result that we had to absorb in terms of supplies chain issues, disruptions, material cost increases that we could not automatically factor into the existing order book, et cetera, we would have probably been there already, to say it very simple. Let's see how 2023 turns out. You know that typically we are, at least at the beginning of the year, a bit more on the conservative side. That would tell the story for 2023. For 2024, I'm not so much concerned because, you know, of course, we're talking and we're quite open in talking about the cyclicality in the furniture business. What we see from the pipeline is not, you know, like a recession or a cut in the order income coming. We're not so negative about 2024, and the pipeline is still strong. Customers take a bit more time to decide. This is what we were trying to explain in our presentation, where we say, "Look, the market is a bit more uncertain, but we still have a number of projects." Even for 2024, from this point of view, we are not concerned on the one hand, when it comes to top line. In terms of bottom line, we believe that we have a number of measures in place that bring us towards our midterm goal. Okay. Thanks. Very clear. Also thanks for, yeah, maybe identifying your HOMAG guidance as potentially slightly conservative. I was trying to avoid asking the question, but thanks for mentioning that proactively. Thank you, Ingo. The next question comes from the line of Nicolai Kempf from Deutsche Bank. Please go ahead. Yes, good afternoon. It's Nicolai Kempf here from Deutsche Bank. My first question is about the margin development throughout the year. Is it fair to assume that you see a similar development as last year with the margin improving throughout the year with the phase out of low margin contracts? My second question would be on input pricing. Did you reach peak from here? Do you expect, like, a small headwind from input prices here or even a tailwind? Thanks, Nicolai. If I got you right on the margin development during the course of the year, we typically have kind of a seasonality in our business, wherever it comes from. That somehow drives also from a volume perspective, consequently, the margin. Overall, on the QFS side, that was also common in that direction. I can really confirm that we have outgrown the most of the lower margin orders, and all the orders that we have taken last year have much better than average margins, number one. Number two, as a protection in those contracts, we have price escalation clauses. Meaning that in cases material costs or overall costs further increase, we, with an automatic inflation, if you will, we can forward those increases to customers. On the other hand, yes, fair to say, if cost decreases, we also will give back some money to customers, which is fine because we save with them on the cost side anyway. I think when it comes to the order book, actually, there I'm talking for all the divisions, we are in a quite comfortable situation, much better than the year before or the year there before. Not sure if that answers your question. If it doesn't, please further continue to ask. No, that's fine. I think you answered both questions in one answer. Thanks. All right. The next question comes from the line of Felix Borax from Amundi. Please go ahead. Yes. Hi, good evening. Thanks for taking the time today. I wonder whether you could give us a bit granularity on the key items behind this, in my view, strong growth guidance on the paint shops. Is this rather driven by strong execution or more by, you know, after market and energy efficiency demand on the existing fleet? Thank you. Thanks, Felix for asking. It's a mix. Overall, there is not so much greenfield. There is a few nice greenfield orders, but most of what we currently see is larger brownfields, where customers either refurbishing paint shops that have become pretty old and/or in many cases, and also following requirements to fulfill their sustainability targets. Mm-hmm. That drives a lot of brownfield work and in some cases, yes, there's also smaller service/aftermarket jobs, but the majority of the orders that we see right now, and that's good for us. Yeah. Is rather complex, big brownfield orders, in many cases of paint shops that we have built a decade or two ago. Okay. I guess, the this change in the mix, with more brownfield is also reflected in the margin, right? Absolutely. That, of course, offers more margin potential than the more competitive greenfield work. Even on greenfield jobs, with our cost measures that we've implemented on our own products, we are quite successful. Customers more and more trust us as the competitive environment, let me say so, has worked into our favor. Okay. Thanks a lot. Thank you. The next question comes from the line of Sven Weier from UBS. Please go ahead. Good afternoon. Thanks for taking my question. Apologies if you mentioned that in the prepared remarks. I was stuck on another conference call. It's regarding the divisional guidance order intake for Paint and Final Assembly Systems. I heard you mentioning there was also a timing issue on Q4 orders, and the pipeline is above the capacity limit. Even if I take the high end of the order intake guidance for the division, it's below what you had in 2022. Does it mean the pipeline that is above the capacity limit is allowing you to be selective or is your capacity limits on revenues 1.75 billion? That's. Mm-hmm. That's a good question, Sven. We have become more and more selective. The order intake that you have seen for last year is more or less our capacity limit. It's sometimes hard to say because two smaller jobs for the same value, of course, consume more capacity than one larger job. You cannot very clearly say that, you know, the total of a certain order intake is the capacity limit. But what we have booked last year for Paint and Final Assembly Systems is about the capacity that we have installed. That perfectly follows our strategy. When we reduce capacities, we've been talking about this before, when we were reducing capacities in Europe by about 30% in the business two years, two to three years back, it was exactly our intention to define a certain capacity that allows us to become selective. If you will, the dilemma from the past was to feed the beast, if I may say so, the beast has become much smaller now. This beast now gets the right food in order to be healthy. That's exactly what we do right now. The pipeline remains extremely strong, I can only encourage you to watch Q1 numbers in the business, and that will answer the question in terms of the market. The pipeline remains extremely good and allows us to become more picky. So you have no intention also to raise that capacity limit anytime soon. You wanna keep it at that level also in the coming years or? Exactly. Yeah. In very simple terms, if I look at the business and we talk about our midterm target of 8%, that midterm target of 8%, of course, comes as a mix from our businesses. The more I would grow PFS at a certain level of margin, the more it might distort the overall profitability in very simple terms. That's why keep the business where it is, become more selective and carefully grow, but grow some of the other businesses much faster. Okay. Understood. Thank you very much. Thank you, Sven. We currently have no questions in the queue. As a reminder, please press star one if you would like to ask a question. The next question comes from the line of Marianne Boulad from Bank of America. Please go ahead. Yes, thank you for taking my follow-up question. I was just wondering on the MPS margin guidance. You're guiding a bit below what you did in Q4. I was wondering if you could give a little bit of color on this and what are maybe the building blocks of the guidance? Thanks, Marianne. I mean, the Q4 I was talking a bit earlier today when we were talking to the press, that the 10% is something we want to get used to, and of course we want to get used to the 10% of MPS, but maybe not as an average for this year. MPS with a little bit different mix in the business a couple years ago, was continuously above 10%, so we're working to reach those 10% again. The mix of business that we had in Q4 was a bit favorable for margin. We do not anticipate this to be repeated every quarter during this year. In average, of course, our intention is to further build the profitability. That as a comment on this one. Okay. Okay, thank you. Very clear. Thanks. The next question comes from the line of Ingo Schachel from BNP Paribas Exane. Please go ahead. Yeah, thanks for taking follow-up question. I just wanted to ask for a quick update on your M&A pipeline. I think you had identified a few areas where you wanted to grow through acquisitions. Has anything happened in this regard in terms of progress or maybe also opportunities that you saw in the past not having materialized? Thanks, Ingo. Yeah, we're constantly watching, looking at potential acquisitions and, by accident, we were not doing any acquisition last year. As you know, it's always an issue of, as you just mentioned, opportunity and then, also, you know, executing the opportunity. Yes, we continue to watch in the fields that we had mentioned before. We said that in the high-performance automation, which today is our teamtechnik and HEKUMA business that has developed extremely well, in 2022 compared to 2021. We are constantly looking at acquisitions, as we speak. That's what we said from the beginning, and this is what we're doing. We continue to look at acquisitions in the area of digitization. All this remains intact, and it really depends on the opportunity. We constantly have something on our desk, if I may say so. Thank you. The next question comes from the line of Peter Rothenaicher from Baader Bank AG. Please go ahead. Yes, hello. You've given relatively cautious guidance for free cash flow, clearly understandable due to given the high order intake you had in 2022 and perhaps here some weaker view. What I do not understand is that you are so cautious in terms of your net financial position. What is the reason for that? Peter? Yeah, Peter, sorry. I hope you can hear me. Yeah. First of all, as you said, cautious in regards to the free cash flow guidance due to the impact that we will see in line with a lower level of order intake and also reduction of the initial payments from our customers. We need to balance this on the other side then in conjunction with the net with the inventory development, and that's what we're focusing on. There remains some uncertainty because not all of the supply chain issues disappear. Situation improve, but we need to manage and maintain also reasonable safety stock levels to make sure that we can execute our projects in line with this. With the context when impact on the net financial status, we are also a bit cautious in that conjunction. You know that actually, one of the maturities is coming up in the coming months. We are currently looking in how to deal with this. We are all to be cautious. Do not understand what this has then to do with, net financial status. In regards to the refinancing? Yeah. It's also, it's on one side, our net financial status is the comparison or it's reflecting both on one side, what we're having as cash on hand. This is influenced of course by the now cash flow generation. On the other side, it's the let's say loans outstanding that we are having. Okay. another question on HOMAG. I think clearly prospects regarding sales and profitability for 2023 look favorable. You have in your presentation the market overview for furniture equipment sales. Here you have a significant dip in 2024. On the other hand, on your presentation, you did sound not that pessimistic for 2024 and also giving your guidance in terms of order intake and sales for HOMAG in 2023. I think you still have a strong order backup for 2024. Is it fair to assume that for HOMAG we should not fear a significant decline in sales for 2024? Thanks, Peter. That is a very fair statement. You know, those market projections are always very difficult. Already very difficult sometimes to distinguish between order income and sales. Data we rely on in many cases is more or less driven by us because we are the strong player. In essence, long story short, we start the year with a strong backlog in HOMAG. We have a good pipeline. We have seen in Q4 a bit uncertainty in the market. We are a bit more cautious, of course, as you can see in our guidance, but we are overall not pessimistic. We are very confident when it comes to construction elements, which is becoming more and more relevant. Also on the furniture side, we are of course a bit cautious, but we're not pessimistic. Definitely we're not. Is there a differentiation in the market demand at HOMAG in particular for the furniture segment? Is perhaps China, does it look better than Europe and North America, more solid, or what is the situation? Yeah. If we look at last year, we had seen more in the second half of last year, slowing down in Europe being well compensated by still good orders from China and North America picking up extremely well. What we are seeing is a bit of a bit more sunshine in Europe, starting of the year. We continue to be comfortable for North America, which has been very positive last year. China, we will have to see. We've been very strong in China. China, in our business sometimes depends on a few larger orders as we are more in the top segment in China. Overall in a mix again, I can confirm we're not so pessimistic. We hope that Europe stabilizes. That's our assumption at the moment, at some level, and we continue to be positive for North America and a few other regions. Okay. Thank you. Very helpful. Thank you. As one last reminder, please press star one if you would like to ask a question. We have no further questions in the queue, so I will now turn the call back over to your host for some closing remarks. Okay. Thank you very much, everybody, for your interest and for attending the call and asking the questions. If you have any further follow-up questions, please contact us, the investor relations department and colleagues, and we will be happy to help you further. Thank you very much. Have a nice afternoon and hope to talk to you soon. Thank you for joining today's call. You may now disconnect your lines.